Procurement

Question 1

Name five factors in the Make or Buy decision

Answer 1

• Functional and technical specification impacts cost and time
• Capacity, speed and availability required
• Specialist or technical support
• Definition of the required quality aspirations
• Engagement with relevant internal & external stakeholder groups

Question 2

Name the key drawbacks of an integrated supplier

Answer 2

• Difficulties in feeding back issues in service
• Difficulty maintaining confidentiality of certain aspects of the project

Question 3

Name the key drawback of a single supplier

Answer 3

Risk of over-reliance resulting in shortages & disruption

Question 4

Name the key drawback of a multi-suppliers

Answer 4

Increased cost in contract negotiations and management resource

Question 5

Name the key advantage of multiple suppliers

Answer 5

Reduced risk of supply shortage/disruption

Question 5

Name the key feature of a single supplier

Answer 5

Preferential rates / volume pricing associated with a strong existing relationship

Question 6

Name the key feature of an integrated supplier

Answer 6

Integration of supplier into the project team

Question 7

Name the key advantage of a single supplier

Answer 7

Less procurement time & cost attached to procurement

Question 8

Name the key advantage of an integrated supplier

Answer 8

Optimum service delivery through immediacy of contact, easier Comms, greater transparency and understanding

Question 9

Name the key feature of multiple suppliers

Answer 9

Price competition between suppliers

Question 10

What are the four Supplier reimbursement terms?

Answer 10

1. Per-unit quantity (schedule of rates or bill of quantities)
2. Cost plus fee
3. Contract target cost/price
4. Fixed price

Question 11

What is the risk balance of Per-unit quantity (schedule of rates or bill of quantities)?

Answer 11

Lowest risk to Supplier, Highest risk to Customer

Question 12

What is the risk balance of Cost plus fee?

Answer 12

Lower risk to Supplier, higher risk to Customer

Question 13

What is the risk balance of contract target cost/price?

Answer 13

Higher risk to supplier, lower risk to Customer

Efficiencies/losses are split

Question 14

What is the risk balance of Fixed price?

Answer 14

Highest risk to Supplier, Lowest risk to customer

Question 15

What is Cash flow?

Answer 15

The Amount of Money moving in and out of an organisation or Business over a specified period

Question 16

What is a win-win?

Answer 16

Win–win scenario is a situation that produces a mutually beneficial outcome for two or more parties